What Facebook Can Learn from Google’s I.P.O.

In the wake of Goldman Sachs’s $450 million investment in Facebook, whispers about the Web site’s imminent-ish I.P.O. have grown to a roar. Mashable, for one, suspects the company may go public by May 2012. So does Bloomberg BusinessWeek, which speculates that “Facebook would benefit from another year of growth absent the added scrutiny that comes with a public listing, instead of holding an IPO in 2011.” Wall Street and Silicon Valley have not been party to such frenzied I.P.O. rumormongering since 2004, when a six-year-old Google went public. When (if?) Facebook does register for an I.P.O., might the company take cues from its mighty forbear? As The New York Times reported, the first day Google went public, “the company used a modified Dutch auction to sell its shares. A Dutch auction is supposed to make it easier for individual investors to buy stock and minimize the usual first-day ‘pop’ by seeking out the fair-market price.” According to a CNN article from 2004, prospective Google bidders specified the number of shares they desired, and at what price they’d pay for them. “The final IPO price will be determined after the auction closes,” CNN noted. “The underwriters will calculate it by gathering all the bids and calculating the cut off point at or above which all the shares available can be sold.” Facebook,perhaps to a fault, is a believer in the saledemocratization of information.

Facebook must also choose a four-letter NASDAQ symbol—something that says “Buy!” and also “Facebook!” (Google chose “GOOG.”) Unfortunately, “FACE” has already been claimed by the wily scoundrels at Physicians Formula Holdings, Inc. “ZUCK” is available, as is “BOOK.” We recommend against the latter, lest these titans of tech want to be mistaken for a publishing company. “POKE” is also up for grabs, as is “WINK,” a confusing option whose only raison d’être would be to further antagonize the company’s dual bêtes noires, Cameron and Tyler Winklevoss.

One aspect of the Google I.P.O. that Facebook should be loath to repeat is something resembling the infamous Playboy article featuring Google co-founders Sergey Brin and Larry Page. A week before Google filed for its public offering, Brin and Page granted an interview to the magazine. “For the [Securities and Exchange Commission], it raised questions about whether the article ran afoul of so-called quiet period rules, which restrict what insiders at a company can say outside of a prospectus before a stock offering,” according to the Times. In the end, the S.E.C. did not force Google to delay its I.P.O., as the commission had earlier that year with Salesforce.com in response to the company’s chatty C.E.O. Terseness and ambiguity should be no problem for Facebook’s C.E.O., Mark Zuckerberg, who seems to have learned from past journalistic mistakes.